Correlation Between Singapore Airlines and AECOM TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Singapore Airlines and AECOM TECHNOLOGY at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Singapore Airlines and AECOM TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Airlines Limited and AECOM TECHNOLOGY, you can compare the effects of market volatilities on Singapore Airlines and AECOM TECHNOLOGY and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Singapore Airlines with a short position of AECOM TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Airlines and AECOM TECHNOLOGY.
Diversification Opportunities for Singapore Airlines and AECOM TECHNOLOGY
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Singapore and AECOM is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Airlines Limited and AECOM TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM TECHNOLOGY and Singapore Airlines is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Singapore Airlines Limited are associated (or correlated) with AECOM TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM TECHNOLOGY has no effect on the direction of Singapore Airlines i.e., Singapore Airlines and AECOM TECHNOLOGY go up and down completely randomly.
Pair Corralation between Singapore Airlines and AECOM TECHNOLOGY
Assuming the 90 days trading horizon Singapore Airlines is expected to generate 2.21 times less return on investment than AECOM TECHNOLOGY. But when comparing it to its historical volatility, Singapore Airlines Limited is 1.06 times less risky than AECOM TECHNOLOGY. It trades about 0.05 of its potential returns per unit of risk. AECOM TECHNOLOGY is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 7,027 in AECOM TECHNOLOGY on August 25, 2024 and sell it today you would earn a total of 3,673 from holding AECOM TECHNOLOGY or generate 52.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
Singapore Airlines Limited vs. AECOM TECHNOLOGY
Performance |
| Timeline |
| Singapore Airlines |
| AECOM TECHNOLOGY |
Singapore Airlines and AECOM TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Airlines and AECOM TECHNOLOGY
The main advantage of trading using opposite Singapore Airlines and AECOM TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Airlines position performs unexpectedly, AECOM TECHNOLOGY can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AECOM TECHNOLOGY will offset losses from the drop in AECOM TECHNOLOGY's long position.| Singapore Airlines vs. Qurate Retail Series | Singapore Airlines vs. Ross Stores | Singapore Airlines vs. National Beverage Corp | Singapore Airlines vs. QURATE RETAIL INC |
| AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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